Fri 20 Apr 2018, 08:56 GMT

Oil and fuel oil hedging market update


By the Oil Desk at Freight Investor Services.



Commentary

Brent closed last night up $0.40 to $73.78, and WTI closed at $68.29, down $0.18. What has the week brought us? Another beaut of a week if you're a bull (any bears out there? no? just my colleague? OK then). Since April fool's day, Brent is up 9%. Impressive. I read that crude stocks have finally reached the 5-year average. Hang on a minute, the whole reason the oil market collapsed when news of the "glut" came about was because there was so much oil compared to previous years. So, if oil stocks have finally reached levels compared to the 5-year average, then how is it a good thing? Let me put it this way: Say 5 years ago I weighed 80kg, 5 years later I weigh 160kg, but during the last year I have managed to lose 2kg, ss that 2kg something to be happy about? No, I'm still as fat as an orca and I need one of those stair lifts just so I can go to bed. Like I said yesterday, none of it really matters. All that matters is that OPEC are high-fiving each other about reaching this milestone and the bulls concede, roll over, have their tummy tickled and buy as much as they can accordingly. I will acknowledge (if Goldman's are to be believed that is) that demand does look rather good. It also looks like scrubbers are not going to be as successful an option as some had hoped, with fewer than 1,100 ships likely to have them installed by 2020.

Fuel Oil Market (April 19)

The front crack opened at -13.25, weakening to -13.55 across the day. The Cal 19 was valued at -14.90. Asia's front-month high-sulphur fuel oil crack widened its discount to Brent crude on Thursday, falling to the widest discount since August 2016 amid the rise in crude prices.

The May 180 cSt fuel oil crack to Brent settled at minus $9.64 a barrel on Thursday, down 72 cents a barrel from the previous session.

Sing weekly onshore fuel oil inventories fell 9%, or 1.751 million barrels, to a more-than-10-month low of 17.941 million barrels in the week ended April 18.

China's fuel oil output in March fell 10 percent from the same time last year to 1.98 million tonnes, according to the National Statistical Bureau on Thursday.

Economic Data and Events

* 6pm: Baker Hughes rig count

* ~630m: ICE wkly commitments of traders report for Brent, gasoil

* Commodity Futures Trading Commission weekly scheduled report on futures and options positions

* OPEC's Joint Ministerial Monitoring Committee meets in Jeddah, Saudi Arabia

* Russia 10-day Urals program for May

Singapore 380 cSt

May18 -391.25 / 393.25

Jun18 -390.25 / 392.25

Jul18 - 388.75 / 390.75

Aug18 - 387.25 / 389.25

Sep18 - 385.25 / 387.25

Oct18 - 383.25 / 385.25

Q3-18 - 387.25 / 389.25

Q4-18 - 380.75 / 382.75

Q1-19 -372.00 / 374.50

Q2-19 - 364.75 / 367.25

CAL19 - 345.50 / 348.50

CAL20 - 280.50 / 285.50

Singapore 180 cSt

May18 - 402.25 / 404.25

Jun18 - 401.25 / 403.25

Jul18 - 399.75 / 401.75

Aug18 - 398.25 / 400.25

Sep18 - 396.25 / 398.25

Oct18 - 394.25 / 396.25

Q3-18 - 398.25 / 400.25

Q4-18 - 391.75 / 393.75

Q1-19 - 383.25 / 385.75

Q2-19 - 377.25 / 379.75

CAL19 - 360.50 / 363.50

CAL20 - 304.50 / 309.50

Rotterdam Barges

May18 378.25 / 380.25

Jun18 377.75 / 379.75

Jul18 376.25 / 378.25

Aug18 374.25 / 376.25

Sep18 371.50 / 373.50

Oct18 - 368.25 / 370.25

Q3-18 374.00 / 376.00

Q4-18 364.50 / 366.50

Q1-19 3356.25 / 358.75

Q2-18 347.25 / 349.75

CAL19 326.00 / 329.00

CAL20 262.00 / 267.00


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MPA chief outlines the sector’s adaptation to supply chain disruptions while advancing automation and alternative fuels.